Pension reform snarls Calif. budget talks

Gov. Arnold Schwarzenegger stepped up the pressure this year calling on lawmakers to reform what he calls California's over-generous pension system, which he says is bleeding the state's budget dry year after year.Two bills came as a result of the pay and pension scandal in the city of Bell.

A third addressed pension spiking.

But the governor vetoed all three.

"The problem is, these bills didn't do anything at all," said the governor's press secretary, Aaron McLear. "It was a knee-jerk reaction to what was happening in Bell and that's a good thing. We should be addressing what's happening in Bell."

The Bell measures would have prohibited employment contracts for city administrators that include automatic raises and renewals, which is how Bell's former city manager Robert Rizzo's salary rose to almost $800,000 a year under the radar.

Most pensions are based on the last year of employment, so his retirement is around $600,000 a year.

Another bill would have capped the salary used to calculate pensions.

State Sen. Joe Simitian (D-Palo Alto) wanted to end pension spiking in his bill, where uniform allowances and unused vacation and sick time are added to pad the end-of career salaries so that the pensions are huge.

"My view is, it's better to light the candle than curse the darkness," Simitan said. "In this case, we missed an opportunity to shed a little light, to solve a real problem, then put ourselves in a position to take the next steps." Good government groups said it's better to take small steps to reach the bigger goal of overhauling the pension system than wait.

"It's really frustrating," said Derek Cressman of Common Cause. "Clearly, voters not only in Bell, but across the state are outraged by what we've seen.

"And we really need the Legislature and the governor to come together on these and do something about it and we're not seeing that."

But McLear said it's not so.

"The governor is not into baby steps," McLear said. "The governor is into solving problems."

Schwarzenegger has repeatedly said he wasn't going to sign a budget until he got the pension changes he wants. This year's record-long budget stalemate is partly because democrats wouldn't sign off major pension changes.

The governor seeks to raise the retirement age and making state workers contribute more to their pensions.